MTN Nigeria has emerged as the largest contributor to the country’s Value Added Tax (VAT) pool, paying over ₦200 billion monthly, according to Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee. Oyedele revealed this during a recent Channels Television Town Hall on Tax Reforms.
He highlighted the need for reforms in Nigeria’s VAT distribution system, noting that the current framework allocates all VAT paid by MTN to Lagos State, where the company’s headquarters is located, despite the nationwide consumption of the telecom giant’s services.
“MTN is the largest contributor to VAT in Nigeria, paying over ₦200 billion monthly. Yet, all this revenue is credited to Lagos State, even though services generating it are consumed across the country,” Oyedele said.
The proposed reform aims to redistribute VAT revenues more equitably among states based on consumption patterns rather than corporate headquarters’ locations. Under the current system, Lagos retains the entirety of MTN’s VAT contributions, but the reforms would reduce Lagos’ share to approximately 20% while reallocating the remaining revenue to other states.
“This adjustment ensures that states where the VAT is generated get their fair share,” Oyedele explained. “Lagos’ share decreases slightly, but every other state benefits.”
The reforms are part of a broader fiscal policy overhaul designed to address inefficiencies, promote fairness, and strengthen Nigeria’s tax system. While the proposal has sparked debates, with critics alleging potential biases, Oyedele defended the initiative, calling the current system flawed and inequitable.
“If the system is unfair, fixing it should not be a matter of contention,” he argued.
The tax reform bill’s provisions include a more balanced revenue-sharing model, addressing fiscal disparities, and ensuring that states gain proportional benefits from economic activities within their borders.
The proposed changes represent a significant step in Nigeria’s efforts to revamp its tax system and promote sustainable fiscal policies.
